Holds the stocks of companies involved with malls, shopping centers, and free standing stores. Some of the top holdings in this fund include Simon Property Group, General Growth Properties, and Kimco RealtyCorporation.

Politicians were raking over the ashes of elections for the European Parliament that have shaken mainstream political parties across the continent and challenge some of the European Union's fundamental policies.

Once-fringe parties strongly opposing what they view as a loss of sovereignty to Brussels claimed first place in France, the U.K. and Denmark. Traditional parties suffered a drubbing across most EU countries.

National leaders and officials in Brussels, who will go over the results at a summit, can take comfort from the knowledge that many voters use European elections to register a protest vote, then return to their traditional parties in national elections.

Nigel Farage's UKIP was the top vote getter in the UK with about 29% of the vote

Marine Le Pen's Front National party was the top vote getter in France with 26% of the vote

The Danish People’s party is the largest party in Denmark with about 25% of the vote

Beppe Grillo's Five Star Movement is a likely second-place finisher in Italy

Alexis Tsipras' Syriza part is the top vote getter in Greece with about 26% of the vote

Race for Commission Presidency

The coalition infighting begins. The Euroscpetics will not vote for either Juncker or Schulz so it is going to be a difficult process coming up with 376 votes.

Should Juncker ultimately prevail, he will not be willing to bow down to UK prime minister David Cameron's proposed rule changes.

The whole setup is messier than it appears at first glance. Significant rule changes which Cameron has promised before an up-down vote on the UK staying in the EU seems highly unlikely, at best, no matter who triumphs as EC president.

Saxo Bank chief economist Steen Jakobsen had a few comments on the European parliamentary elections.

Here's my two cents on the EP-2014: One conclusion which stands out is growth and reform will be delayed. The trade remains LONG fixed income. Everything which just happened in Ukraine, ECB and now EP-2014 has a negative growth/inflation impact.

Europe is caught out – miscommunication is the norm, and the mandate for change just moved further away despite the strong showing for anti-EU votes.

The anti-EU vote is diluted by institutional frameworks and a modus operandi in proceedings which makes it impossible to change the course, but hopefully It can change the pace.

Europe rejected Barosso’s idea that the solution to Europe’s problem is more Europe – they shouted: No! It’s a better working Europe.

European project at risk as voters reject Brussels' push for ever-further integration,

Real losers in vote continue to be unemployed and growth prospects as Europe divisions rise

Across Europe, EU-sceptic voters gained ground, but it could be in vain as the overall majority of the old guard: Conservative, Liberals, Greens and Social Democrat’s still carry 70 percent of the mandates.

How the protest votes engage with the main stream parties will set the tone for Europe over the next five years. If the protest parties just want a floor to shout “No thank you to Europe”, then we will see the old parties align themselves more towards the middle and dilute the negative votes. On the other hand, if the EU-sceptic votes want real influence, then compromise and seeking real influence on key votes will be the strategy.

The European Parliament makes a new law every second day, which is scary in itself, but it also shows you that Europe today is very much a machine where stopping the momentum is extremely hard. The EU system is built and set up to protect the bureaucratic model and it clearly favours pro-EU inclined political parties.

This biased set-up and momentum makes the results in the UK, Italy, Greece, Denmark, and France impossible to ignore. The implications in France and the UK carries the biggest weight where Marine Le Pen's National Front took 25 percent of the vote foran estimated 25 seats and Nigel Farage's UK Independence Party obliterated the traditional parties of power to take 28 percent of the poll and an estimated 23 seats.

The chances of a UK voting no in the referendum next year is now a clear and present danger. UKIP has arrived at the national scene, likewise in France where Marine Le Pen has now clearly become a force to reckon with in the next Presidential election.

A move to a more wait-and-see attitude away from the full support for everything European will be the biggest marginal change in Europe. By ignoring the wishes of their voters, a lot of mainstream parties across Europe are now looking for a new strategy – a strategy which after this week’s election will entail less Europe, not more.

It is also in total opposition to EU Commission President Jose Manuel Barosso’s State of the Union speech where he said: “the problem with Europe is not that we have too much Europe, it’s that we have too little”. Europe’s voters clearly disagree and the consequences of this EP election may be slow and small, but significant.

The new European Parliament will have stronger democratic credentials which is anchored in the Lisbon Treaty and includes new lawmaking powers. It will be decisive on the majority of EU legislation. In total, over 40 new fields have been added including agriculture, energy policy(or the lack of it), immigration and EU funds. The Parliament also has the final say on the EU budget.

The biggest immediate change will be that the new President of the European Commission will need to have the approval of the Parliament to take office. We can expect a major fight between the EU Council and the European Parliament on exactly this point. Don’t expect any consensus before the last minute.

The 751 members of the EU Parliament operate through coalitions of interest across countries and sometimes political standpoint. The final date for submitting a coalition is June 23, and a “coalition” has to be at least 25 members from seven different nations.

Here the protest votes can play vital role. The Europe-sceptic vote is divided. The risk is that, similar to the Occupy movement in the US, a lack of common goal, except those of a negative nature, allows the majority get away with ignoring what clearly is a call from the voters to the politicians that Europe is too far away from the daily life of its 500 million citizens.

The Banking union, high unemployment and low growth remain formidable challenges. I still see a dramatic slow-down in Germany into 2015 as the biggest risk for Europe. Germany has been the locomotive so far, surviving by exporting to Asia during this crisis, but now Asia is slowing down leaving us with less export in Europe.

The EU “economic police” will be tested. France and Spain is already in violation of budget deficits for 2014 and 2015. The so called “recovery” is actually a stabilisation, not recovery. In history, unions, even primitive ones, fail when economic times turns negative. A new test is upon us as we leave 2014 in my opinion, and has not been made easier by the new European Parliament. Voters and politicians are clearly not agreeing. Putting anything European to a referendum will be risky and hence Europe is now on move to a pace of speed walking from jogging along.

The market is ignoring the European Parliamentary 2014 results, they see the glass as half-full. However, as the new European Parliament gets down to business, the in-fighting will continue in the European Council, in the European Parliament, between the EU Council and European Parliament, and between the EU and the voters of Europe. That is the ultimate conclusion: Europe’s politicians and its voters have never been further apart. The price for that is a continued flow of miscommunication which will leave Europe weaker, with less decision power and ever-widening rifts.

As George Bernard Shaw once said: "The single biggest problem in communication is the illusion that it has taken place".

What Europe needs is to move forward with a political and fiscal union to consolidate and progress. It will clearly not happen. It also needs to simplify its business. Also very unlikely to happen. We have just increased the complexity of politics and decision making. The loser, as always remains the unemployed, growth and reforms. The victor: Buying more time. Sad. Really.

05-27-14

GLOBAL

GEO-POLITICAL

GROUP

GOVERNANCE

8 - Geo-Political Event

MOST CRITICAL TIPPING POINT ARTICLES THIS WEEK - May 25th, 2014 - June 1st,2 014

For the 3rd time in the last 4 months, world trade volumes dropped. The 0.5% fall in March - it must have been weathery all over the world? - continues the biggest plunge in global trade since May 2009. As WSJ reports, exports from developing economies in Asia recorded the largest decline, a drop of 4.5%. Central and Eastern Europe was the only region to record a rise in exports as the decline in trade flows is consistent with other evidence that suggests the global economy got off to a weak start this year. So, $12 trillion of global money printing and world trade is unable to sustain growth...

The last 4 month shave seen the biggest tumble in world trade since the financial crisis...

As World Trade has decoupled from the money-printing mania of the central banks as transmission mechanisms everywhere are saturated and broken...

We may have dubbed Russia's historic, and 30 years in the making until John Kerry et alaccelerated it, gas deal as the "Holy Grail" of New Normal trade arrangements, and it turns out we weren't alone in evaluating the strategic implications of this epic Russian, and Chinese, pivot toward each other. Moments ago, Russian billionaire Gennady Timchenko, shareholder of Gazprom competitor Novatek, chairman of the Russian-Chinese Business Council, and former co-owner of commodities trading giant Gunvor, said that "Economically it’s the most important event of the past decade."

Some of Timchenko's other soundbites via Bloomberg:

"The contract allows a balance between Europe and China”

"There will probably come a time when Gazprom’s monopoly won’t be a monopoly"

More importantly, now that the ground has been set, the Gazprom-CNPC deal is just the beginning:

Timchenko says also seeking to expand Yamal LNG, Sibur business with Asia; Volga Group is looking at China projects

Chinese propose participation in domestic pipeline projects, LNG terminals to Timchenko, as Volga Group owner and Novatek board member
"We have the desire” to invest in China, no specific talks for now

Volga has water reservoir in China, doesn’t rule out investing in development for bottled water

It may be ironic, but quite soon China could participate in building a bridge between Russia and its latest territorial property: Crimea.

USK Most, co-owned by Volga, plans to bid in tender to build bridge between Russia, Crimean Peninsula through Kerch strait together w/ Mostotrest, co-owned by Arkady Rotenberg, also on U.S. sanctions list

Says doesn’t rule out China cos. participating in bridge project

Finally, here is why the next company to feel the "costs" of US sanctions will not be Russian, but America's own Caterpillar:

If sanctions tightened, Volga Group construction units may seek equipment suppliers in China to replace U.S. cos. such as Caterpillar

Which of course would be even more bullish for CAT as it would force management to lever up even more and to buyback a record amount of its own shares just to give the impression that collapsing revenue and future business prospects is the most bullish thing that could happen to the industrial giant.

Tipping Points Life Cycle - ExplainedClick on image to enlarge

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